Free Online Unauthorized Best PPT to PDF Co... Guesun-DeLLID Beta Ltd is a manufacturer of various electronic units. Recently one of its large customers, Venus Ltd has offered a contract to Beta Ltd for the supply of 600 units. Below are the details for the production of each unit: Material requirements: 4 kg of Material X 3 kg of Material y 2 kg of Material Z Note t: Material X is in continuous use by the business: currently 2,000 kg is held by the business. This material of was originally bought for 65 per kg. It would cost 80 per kg to replace it. Sales value is 70 per kg. Note 2:1,200 kg of Material Y is currently held by the business. This material of was originally bought for 32 per kg. The material is not used by the business for last two years. Its scrap value is 15 per kg. The only foreseeable alternative use is as a substitute for material K in constant use) but this would involve further processing cost of 5 per kg. The current buying cost of material K is 18 per kg. Replacement cost for material Y is 35 per kg. Note 3: Material Z is regularly used by the business and currently there is none available in the business. An order for 500 kg is shortly to be placed for another project by the business. The price for this material is 60 per kg, but the supplier allows a bulk discount of 10% per kg, for the entire order, for orders of 1,500 kg and above. Skilled labour. Each unit requires 4 hours of skilled labour. It is currently paid at a rate of 28 an hour and skilled labour is hired on a permanent basis. 600 hours can be provided by members of staff who currently have no work to do due to a quiet time. Only taking staff off other work can provide the remaining hours needed for this new project and doing so will bring a lost revenue of 67 per hour and savings from material which is 212 per hour. Semi-skilled labour. Each unit requires 4 hours of semi-skilled labour. It is currently paid 14 per hour. If the required semi-skilled labour for this project is provided by the existing members of staff who are busy, the business will have to hire new employees at a rate of 18 per hour. Equipment. It cost 500,000 when it was bought 4 years ago. Current depreciation charge per year is 25,000 per year. At present, it is be rented out generating income of 37,000 per year. This equipment is needed for one year in this new project. Overheads: It is Beta's policy to charge a share of the general costs (rent, heating and so on) to each contract undertaken at the rate of 12 for each skilled labour hour used on the contract. If this project is undertaken, the general costs are expected to increase as a result of undertaking the contract by 2,400. Required Calculate the minimum orice at which the contract could be undertaken by Beta Ltd. For each part, you should clearly show supporting workings and provide a brief explanation for your choice.(Total: 35 marks)